RLJ Accommodations and FelCor Merging in $1.2 Billion Offer

Merger Creates Third Largest ‘Pure-Play’ Hotel REIT with Market price of $4.2 Billion

FelCor Lodging Trust Inc.(NYSE: FCH)has actually consented to combine with and become a wholly-owned subsidiary of RLJ Lodging Trust (NYSE: RLJ) in an all-stock transaction.

Under the deal, each FelCor share will be converted into 0.362 shares of recently released shares of RLJ common stock in a taxable merger. The combination is expected to offer RLJ a post-merger pro forma equity market capitalization of $4.2 billion and a total enterprise worth of $7 billion.

FelCor’s stock closed last Friday at $7.32/ share. RLJ’s stock closed at $23.60/ share. A 0.362 share of RLJ’s worth relates to about $8.54/ share. With about 138.1 million shares of FelCor stock impressive, the offer has a stock worth of $1.18 billion.

FelCor owns 38 hotels with 11,329 spaces giving the offer a worth of about $104,150/ room.

RLJ stated combining the entities will establish the 3rd largest ‘pure-play’ lodging REIT by enterprise worth, offering it with more scale to profit from cost effectiveness, negotiate utilize and access to capital, and strategically recycle assets.

The combined business will have ownership interests in 160 hotels with 31,467 rooms, including premium-branded hotels located mainly in urban and seaside markets.

“In addition to being immediately accretive to our RevPAR, combining with FelCor broadens our geographic footprint in highly-desirable markets on the West Coast, while enhancing our existence in other seaside markets in the East and the South,” stated Ross H. Bierkan, RLJ’s president and CEO.

RLJ is anticipating $22 countless anticipated savings from the elimination of duplicative corporate basic and administrative costs.

Following the merger, which has been all authorized by the boards of both business, will maintain the combined company will operate under the RLJ Lodging Trust name and be led by RLJ’s senior leadership, consisting of Robert L. Johnson as executive chairman and Bierkan as president and CEO. The company’s headquarters will remain in Bethesda, MD.

. Worldwide law practice Hogan Lovells recommended RLJ Lodging Trust on a conclusive merger contract. FelCor was encouraged by Sidley Austin LLP.

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